Crypto Exchange Bitfinex Denies Accusation of Insolvency

Hong Kong-based crypto exchange Bitfinex has hit back against claims it is insolvent and disclosed wallet addresses that hold over $1.5 billion in crypto assets.

The company, which shares management with Tether, the venture behind the U.S dollar-pegged crypto USDT, stated in a blog post on Sunday that it is not insolvent, and “a constant stream of Medium articles claiming otherwise is not going to change this.”

Bitfinex called out such allegations as “a targeted campaign based on nothing but fiction.”

The firm further revealed cold wallet addresses holding bitcoin, ethereum and EOS, as claimed proof of the amount of the respective assets it currently holds. It added that the wallets’ contents represents a “small” fraction of its total assets, which also include undisclosed fiat holdings.

Based on the provided addresses, Bitfinex holds at least 148,467 bitcoin, 1.7 million ether, and over 35 million EOS. These cryptocurrencies are worth around $1.5 billion, based on data from CoinDesk’s price index and CoinMarketCap.

Bitfinex’s rebuttal follows a recent article on Medium published on Saturday that claimed the exchange is no longer solvent and urged users to withdraw their assets.

The author, who goes by the title “ProofofResearch” alleged that Bitfinex made “a concerted effort” to censor a number of posts on a sub-reddit that it moderates in which users reported issues with fund withdrawals for at least a month.

However, in its response, Bitfinex claims that “both fiat and cryptocurrency withdrawals are functioning as normal,” adding:

“Verified Bitfinex users can freely withdraw Euros, Japanese Yen, Pounds Sterling and U.S. Dollars. Complications continue to exist for us in the domain of fiat transactions, as they do for most cryptocurrency-related organizations.”

The Medium article also referred to a Bloomberg report last Tuesday as supporting evidence that the Puerto Rican Noble Bank is now mulling a sale and has stopped offering its banking services to both Bitfinex and Tether.

On that front, the exchange said information and accusations surrounding Noble Bank has “no impact” on its “operations, survivability, or solvency.”

The news comes as the latest controversy surrounding Bitfinex as one of the longest-running crypto exchanges. In January, both Bitfinex and Tether were reportedly subpoenaed by the U.S. Commodity Futures Trading Commission.

Months later, amid complaints over lack of transparency, the company published a report – via a law firm, instead of an auditing firm – which claimed the company had $2.55 billion in U.S. dollar reserves to back $2.54 billion-worth of USDT that were circulating on June 1.

However, as CoinDesk pointed out after reviewing the document, it only covered one point in time and did not provide proof of its level of collateralization for other periods.

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